John D’Agostino, Coinbase head of institutional strategy, joins 'Squawk Box' to discuss Bitcoin's recent selloff, if investors should buy into bitcoin and much more.

John D'Agostino, Head of Institutional Strategy at Coinbase, stated that Bitcoin's underlying fundamentals have not changed despite recent market volatility and negative sentiment. He highlighted Bitcoin's historical four-year cycles of significant declines followed by strong recoveries, and noted that the asset is becoming less volatile as institutional and retail participation grows.

D'Agostino pointed to positive structural developments, such as central bank Bitcoin purchases and successful ETF launches, as evidence of the market's maturation. He also addressed the rise of stablecoins, suggesting that while they are increasingly used for transactions, they are unlikely to replace Bitcoin as a long-term asset for most investors.

Bitcoin's fundamentals haven't structurally changed: John D'Agostino

Join us now with more on the crypto market, John D'Agostino, Coinbase Head of Institutional Strategy. We've seen this movie before. What was the biggest sell-off? We had a move from, I think, $65,000 down to $15,000, didn't we, at one point, with Bitcoin? Sure. I mean, so historically, Bitcoin has traded in these four-year cycles. And so we saw 2014, 2018, 2022, material moves down. $20,000 down to $3,000 at one point, I think. Absolutely, yeah. So it can lose 70% or 80% of its value and then only to see new highs again. So generally, after those down years, we've seen two to three years of up 150%, 160% returns. So what do you, what would, what would not, is it less volatile now? Are the sell-offs going to be not quite what they were? Or is it possible, let's see, $125,000, could it go down to $60,000? So mathematically, it is becoming less volatile. Just as a strict standard deviation calculation, it is becoming less volatile. You'd expect that as you have a wider and deeper market. You have more different types of investors. Obviously, the ETFs have brought in a flood of retail. You have more institutions. Harvard Endowment announced they hold more Bitcoin than gold the other day. So mathematically, that's what you would expect. The feel, it doesn't feel that way, to be very honest. The sentiment is brutal right now. And you have to be very, very honest about that. Just like I'm sure, you know, you're holding gold, you feel smart. You didn't, you didn't feel so smart in 2008 when gold lost a third of its value. For years and years and years, you just felt average. Yeah. So, so as we've said many times on this show, trying to market time, any volatile asset can get you in a lot of trouble. If you've systematically invested in Bitcoin over a five-year period, you're up an extraordinary amount. Even year to date, while not great, both Bitcoin and Ethereum, while slightly negative, are, Ethereum's a little bit up. If you stake your assets, you can earn a higher yield. So you're still net positive. Solana's down materially for the year, 25%. Year on year, 41%. However, we had the single best ETF launch of the year for a Solana ETF. So in these situations, I try to step back and ask myself, what has fundamentally changed since, let's say, late September when everyone was incredibly bullish? And the answer for me is nothing. Structurally, we're where we were, if not better. We have the Czech National Bank announcing a central bank Bitcoin purchase, the first Eurozone country to do that. You've got Citibank and JP Morgan announcing stablecoins that they're using to facilitate customer transactions. You've got Harvard Endowment's announcement. You have successful ETF launches. So it's a challenging environment currently. But in my house, we like apples. I don't like apples less when they're on sale. So if you like this asset, you should like it at a discount. What happens if you didn't like it in September and you like it now? Should you like it now at a discount? Because price does matter. I know you're suggesting prices don't matter at all. If you like it because you thought it was overbought, of course. I'm sorry, if you didn't like it because you thought it was overbought, yes. If you didn't like it because you don't agree structurally, probably not. No, I'm just saying, right, sometimes avocados go up and down in price. You may love avocados, but you may say, you know, this is a little rich for my... Sure. The price tag's a little high right now. I'm not going to buy the avocados. But, you know, the next time I walk into the market and the avocados that are a better price, I'll take some. So you're a technical avocado trader in this example. And that makes perfect sense. I would expect technical traders would be buying into the mean reversion trade at this point. So that's kind of why I'm a little bit confident. Again, because structurally, I don't see a regulatory environment in the U.S. or globally that is any worse than it was pre-October. What did you make of, and I've been asking the question a lot, just because I remember being sort of surprised when she first said it. Cathie Wood made a very interesting point. It really did... It's really not. Well, I know you don't agree. To go from one point... Hold on, just... For one thing, to have a price target of 1.5 million is ridiculous to start. To go from 1.2 million... It doesn't even matter. That's not the point. Let me explain. Let me explain. You know what he did. I heard you after. The point is slightly different. The point is that she made an argument that she was surprised about the success of stablecoins and how she believed that stablecoins, to some degree, could crowd out some of the Bitcoin trade because people are going to use stablecoins more for transactions and the like than she originally thought. She thought Bitcoin might be used more for transactions than they will be and that that was a surprise to her. Forgetting about... So, it's only going up 15 times from where it is now instead of 20 times. Forgetting about her price target. You're focused on the price target. Instead of 20 times from where it is now. Okay, I'll just be quiet. Both predictions are ludicrous, right? So, I wouldn't say ludicrous. I think Kathy's an incredibly brilliant person and I trust your judgment. I heard another one of your guests, I think it was Michael Saylor, say that they didn't see the direct correlation between... It's like 20 million, isn't he or somebody? What's his target? At some point in the future, right? I'm not sure I see the users of stablecoin substituting that long-term asset for Bitcoin. And I'm not sure I see the people who want to buy Bitcoin as a unit of currency viewing a stablecoin as a surrogate for that. So, I'm less confident. Andrew, for you...

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